China's Balancing Act on Ukraine Crisis - India App Ban & Huawei Probe - Xi’s Core Status a ‘Magic Weapon’ - US & China Spar in Nepal - Metaverse Frenzy - Munich Security Conference - CPTPP Bid
I. China & the Ukraine Crisis
by Manoj Kewalramani & Swayamsiddha Samal
A lot has been written this week about China’s perspective on the situation between Russia, Ukraine and the West, and the positions that Beijing is likely to adopt in case of further escalation. For instance, WSJ’s Lingling Wei’s report begins with this:
China’s top leaders have spent days weighing how far Beijing should go to back Russian President Vladimir Putin and how to manage a partnership many call a marriage of convenience as opposed to one of conviction. With the threat of a Russian invasion of Ukraine looming, China’s final arbiter of power—the seven-member Politburo Standing Committee led by President Xi Jinping — has largely disappeared from public view. Behind closed doors, according to people with knowledge of the matter, one topic of intense discussion is how to respond to the Russian-Ukraine crisis and back Moscow without hurting China’s own interests.
In fact, Xi Jinping’s first public engagement after the Olympics diplomatic frenzy was a call with the French President, which included a chat on Ukraine. Later, we got more clarity on Beijing’s balancing act from Chinese diplomats. I call this a balancing act because supporting Russia in this situation comes with clear costs for Beijing, particularly in terms of the challenge of sanctions, its commercial interests getting hurt, and the potential reaction across Europe. At the Munich Security Conference this week, the Europeans sought to make this clear to Beijing. Despite this, it’s not like Beijing is not supporting Moscow. It is pushing back against NATO’s expansion. It is attacking the US’ narrative on the situation. And it has repeatedly called for addressing Russia’s “legitimate/reasonable” security concerns. In its domestic news coverage, the dominant narrative is the Russian perspective of the West being the aggressor. But this is accompanied by an emphasis on the need for a diplomatic resolution.
For instance, see bit from Lingling Wei’s report:
“Putin is a major headache for Beijing,” said Carl Minzner, senior fellow for China studies at the Council on Foreign Relations in New York. “A precedent for Russian intervention in former Soviet lands would increase risks to China’s Central Asia energy pipelines.” In addition, giving Russia a free hand to intervene in the post-Soviet space would potentially hurt China’s longer-term efforts to displace Russia as the main power in Central Asia. Reflecting Beijing’s unease on Russia’s position on Ukraine, Mr. Minzner noted, China’s state-media coverage of the Ukraine crisis has settled into a pattern: It blames the U.S. and its allies for delivering weapons to Ukraine and hyping the threats from Russia, but repeats the official Ukrainian position on the need for negotiations.”
Anyway, in this section, we’ll look at the official comments from Beijing and what Chinese analysts and scholars are talking about when discussing the situation.
First, Xi Jinping spoke to France’s Emmanuel Macron on Wednesday. I am only focussing on the Ukraine bit here; you can read the full breakdown of the call and two readouts in my People’s Daily tracker. On Ukraine, Xinhua’s story says this:
“Macron presented his view on the current situation in Ukraine. Xi stressed that related parties should stick to the general direction of political settlement, make full use of multilateral platforms including the Normandy format, and seek a comprehensive settlement of the Ukraine issue through dialogue and consultation.”
The French readout is a bit different. It says that “the French President recalled the importance of respecting Ukraine’s sovereignty and territorial integrity. The Chinese President praised the action of France and Germany within the framework of the Normandy format and reiterated his full support for the implementation of the Minsk Agreements.”
The Chinese foreign ministry also had some comments this week. On Monday, there were these two exchanges:
TASS: According to foreign media reports, the US is evacuating almost all the staff from its embassy in Ukraine. Does China plan to act similarly?
Wang Wenbin: China is closely monitoring the development of Ukraine’s situation. The Chinese Embassy and Consulate-General in Ukraine are working normally, and the Embassy has issued a consular advisory that reminds Chinese citizens and institutions to closely follow the developments and increase their safety awareness. The Chinese Foreign Ministry and our Embassy in Ukraine will stay in close contact with Chinese citizens and institutions there, provide timely consular protection and assistance, and earnestly protect their safety and legitimate rights and interests.
Reuters: So again about Ukraine, does China plan on evacuating its citizens at any point? What might lead China to counsel its citizens to evacuate the country as other countries have done already?
Wang Wenbin: I just shared China’s position on your question when answering the previous one from TASS. I’d like to reiterate that China’s position on the Ukrainian issue is consistent and clear, and remains unchanged. To solve the issue, it is necessary to return to the starting point of the Minsk-2 agreement, which is endorsed by the UN Security Council. As a fundamental political document recognized by all sides, the agreement should be earnestly implemented. All parties should work for the comprehensive resolution of the Ukraine crisis and issues concerned through dialogue and negotiation. We call on all parties to remain rational and refrain from making moves that may escalate the tensions and play up and sensationalize the crisis.
On Wednesday, there was this exchange at the Chinese foreign ministry’s press briefing.
RIA Novosti: “Does China see signs of military aggression from the Russian side, or does Beijing trust Moscow’s claims that troops were sent to regions near the border with Ukraine only for military drills? How does China see the current development of the situation around Ukraine?”
Wang Wenbin: For days, the US has been playing up the threat of war and creating an air of tension. This has gravely impacted the economy, social stability and people’s lives in Ukraine, and added obstacles to advancing dialogue and negotiation between parties concerned. I noted that the Russian side recently said that the West has resorted to “information terrorism” on the Ukraine issue, and that February 15, 2022 will go down in history as the day of the failure of Western propaganda. We must point out that it is exactly the persistent hyping and dissemination of disinformation by some in the US and the West that has added more turbulence and uncertainty to the world already fraught with challenges and intensified distrust and division. We hope relevant parties can stop such disinformation campaign and do more things that benefit peace, mutual trust and cooperation.
On Thursday then, the Ukraine issue was discussed at the UNSC. China’s envoy Zhang Jun had this to say:
To solve the Ukraine issue, it is imperative to return to the implementation of the package (2015 Package of Measures for the Implementation of the Minsk Agreements). China hopes that all parties concerned will take a constructive attitude, resolve through dialogue and consultation whatever differences that may arise in the implementation of the package, and draw up a roadmap and timetable for implementation without delay, so as to pave the way for a political solution to the Ukraine crisis, he told the Security Council. In the current context, all parties concerned should let reason prevail, adhere to the general direction of political solution, and refrain from any act that may provoke tensions or hype up the crisis. The parties should fully consider each other's legitimate security concerns, and show mutual respect, and on such a basis, properly resolve their differences through consultations on equal footing.
Zhang also added: “Everything happens for a reason. Nato enlargement is an issue that cannot be overlooked when dealing with the current tensions related to Ukraine…Nato’s continuous expansion in the wake of the Cold War runs counter to the trend of our times, that is to maintain common security…One country’s security cannot be at the expense of the security of others. By the same token, regional security should not rely on muscling up or even expanding military blocs.”
Later in the week Wang Yi addressed the Munich Security Conference. While his prepared remarks did not address the Ukraine issue, he was asked about it. Below is full coverage of Day 2 of the conference. The video is time-stamped so you can easily navigate to Wang’s comments.
On Ukraine, Xinhua English’s report on Wang’s remarks says:
Wang “urged all parties to take due responsibilities and make efforts towards peace on the Ukraine issue, instead of just escalating tensions, creating panic and even playing up war threat. In terms of the expansion of the NATO, Wang said European friends should seriously ponder whether continuous NATO eastward expansion would be conducive to maintaining and achieving lasting peace and stability in Europe. On the Ukraine issue, it is time to return to the original point of the Minsk-2 agreement as soon as possible, since this agreement is a binding one reached through negotiations among all parties concerned and has been approved by the UN Security Council, and it is the only way out for solving the Ukraine issue, he said. He called on the relevant parties to sit together with a full discussion and work out a roadmap and timetable for the implementation of the agreement. Ukraine should become a bridge of communication between the east and west, instead of the front line of confrontation between major powers, he added. As for the European security, all parties can raise their own concerns, and Russia's legitimate security concerns should be respected and taken seriously, Wang said. ‘China expects all parties to find a solution that is truly conducive to safeguarding European security through dialogue and consultations,’ he added.”
It’s interesting that the report excludes this quote from Wang; although, to be fair, it does figure in the official Chinese language readout of the Ministry of Foreign Affairs:
Finally, do note this from Stuart Lau’s China Direct newsletter: “According to Ukraine’s digital minister Mykhailo Fedorov, Chinese hackers were involved in a series of cyberattacks targeting banks and the defense ministry on Tuesday, my colleague Laurens Cerulus writes in to report, based on the minister’s Telegram account.”
Anyway, let’s now turn to Chinese scholars and analysts’ views.
In his Guancha article, Wan Qingsong, an Associate Researcher at the Russian Studies Centre of the East China Normal University, argued that Russia has no intention of invading Ukraine, although tensions remain high. Some important points from the article are as follows. The Russian military deployment in Ukraine results in a simultaneous strengthening of Western forces in the country. The three “Security Guarantee” negotiations between the US and Russia were inconclusive. On 24 January 2022, the US State Department ordered the family members of the diplomatic staff and the non-essential staff of the embassy to leave Kyiv. The United Kingdom, Canada, Australia, Japan, and the Netherlands followed suit and announced the withdrawal of diplomats and their families. The author blames the US for playing a dual game of trying to mitigate and instigate a war-like situation by provoking Russia.
In this article by Mu Lu, a reporter with the state-run Global Times, the core argument is that the US-led West is shifting the blame of the existing global crisis to China and Russia. According to Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, the ultimate goal of the elites of the United States and the United Kingdom is to overthrow Russia and China. He goes on to say that these countries weave together seemingly unrelated events to create a narrative that benefits them. Lü says that “On the contrary, the ever closer relationship and bond between China and Russia is the last defence that protects the world order.”
In another Global Times article by reporters Yang Sheng and Xu Keyue, the opinion of Chinese analysts on how the crisis benefits the US is highlighted. The major reasons brought out by the article are: legitimising US military presence in Europe by demonising Russia and poisoning Russia-EU ties, increasing ambiguity and concerns to damage the eurozone economy, causing more capital flight from the continent to the US, easing US inflation pressures, and using the tension to cause trouble for China-Russia ties. The article also quotes Jin Canrong, Associate Dean of the School of International Studies at Renmin University of China.
He says:
“It's totally unnecessary for Russia to invade Ukraine at this stage unless Ukraine launches attacks against Crimea or the Eastern Ukraine regions first. But Washington continues to pay great efforts to hype the information about 'Russia's invasion' in the past few months, even though the information sounds very unrealistic and it's harmful for the situation. So the US is doing this for its own reasons.”
Jin later adds: “It's possible that if Moscow and Kiev both keep calm, the US would use its proxies, such as NGOs or agents in Ukraine to create new troubles or to spark conflicts between Russia and Ukraine. This is what we need to pay attention to, rather than worrying about a so-called 'Russian invasion' hyped by the US.”
According to Li Haidong, a professor at China Foreign Affairs University’s Institute of International Relations, maintaining a military deterrence but not attacking Ukraine is the best option for Russia at the moment. A hot war will devastate everything, and neither Moscow nor Kyiv can afford such unpredictability.
In this SCMP article, there were some interesting quotes from different Chinese scholars.
Zhang Tuosheng, a former strategic issues researcher with the PLA National Defence University, says: “Of course we don’t want [an invasion]. We have a close relationship with Russia and maintain a good one with Ukraine.” An invasion, while unlikely, would do Beijing no good in terms of the economic and diplomatic pressure it would face from the US and Europe, he said, adding that China wanted to see agreement reached through negotiation. Zhang, who is now with the Beijing-based think tank Grandview Institution, said China regarded the maintaining of national territorial integrity as an important diplomatic principle. As the crisis on the Ukrainian border has intensified, Beijing has stuck to its line that all parties involved should be “rational” and solve their problems through negotiation.
Shi Yinhong, an international affairs professor at Renmin University, agreed. “If a war breaks out in Ukraine, the United States will realistically have to reduce its attention and resources to China in the Indo-Pacific,” he said. “But on the other hand, the war [would be] a huge step down the path of radicalisation in world politics, and doomed to inflict great pressure on China for an arms race, as well as Taiwan and the South China Sea.” Shi added that it was difficult to conclude how the challenges of a more complicated international environment would affect Beijing’s calculations on Taiwan.
“Taiwan is not Ukraine,” said Wang Jianmin, an expert in Taiwanese affairs at Minnan University in Fujian. But he added that China was closely watching US involvement in the Ukraine crisis – “including the degree and how its allies are involved and the weapons mobilised, which will all be references for us to study”. “But it is not the same as the case of Taiwan, the two are totally different.”
Also Read:
Alexander Gabuev writes from Moscow on why Vladimir Putin and his entourage want war
Japan Calls for Tough Response on Ukraine, Saying China Is Watching
Chinese Support for a Russian Attack on Ukraine Cannot Be Cost-Free
II. India, China & Taiwan
by Suyash Desai
India, this week, sided with Australia against the People’s Republic of China’s policies of using trade restrictions as political tools. Beijing has imposed restrictions on more than $20 billion worth of Australian exports to China but insisted that it is not using “economic coercion” against Australia.
In an interview with Australia’s Sydney Morning Herald, India’s Foreign Minister Dr S Jaishankar criticised China’s economic coercion saying progress and prosperity over the past 80 years resulted from a trading system “governed by rules and not politically influenced.”
Australia-China trade ties had nosedived since early 2020 when Prime Minister Scott Morrison’s government called for an independent investigation into the origins of the coronavirus. Beijing retaliated with trade restrictions, including high tariffs on Australian barley and wine and slowing coal shipments.
When asked by the paper whether Beijing’s actions toward Canberra constituted economic coercion, Dr Jaishankar said, “You know that bit – if it looks like a duck and it walks like a duck.” Previously, Chinese Foreign Ministry spokesperson, Zhao Lijian, denied using trade coercion against Australia and other countries, saying, “(we) always follow WTO rules.”
Elsewhere, China has expressed serious concerns about India’s ban of 54 more mobile applications, citing security reasons. Since 2020, India’s ban list, which initially had 59 Chinese apps, has expanded to 321 apps. An Indian government official was quoted in Reuters saying that India believes user data was being sent via the apps to servers in China. “Such collection would allow the data to be mined, collated, analysed and profiled, potentially by elements hostile to the sovereignty and integrity of India and for activities detrimental to national security,” reads the report. China’s spokesperson from the Ministry of Commerce responded to this ban. “We hope India can take concrete measures to maintain the sound development momentum of bilateral economic and trade cooperation,” said Gao Feng. Furthermore, Indian tax authorities have also carried out raids at the offices of Chinese tech giant Huawei Technologies Co. over suspected tax evasion, triggering a protest from Beijing. Searches are being conducted at the company’s premises in the city of Gurgaon, just outside the capital, New Delhi, and in the southern tech hub of Bangalore, an Indian tax official told The Wall Street Journal.
Sources said the officials looked at financial documents, account books and company records as part of a tax evasion investigation against the company, its Indian businesses and overseas transactions. However, this is not a one-off raid that India has conducted on Chinese firms. The Income-tax department has been conducting searches on leading Chinese mobile companies, including Oppo, Xiaomi and OnePlus. Some Fintech companies are also being searched since December 2021. Earlier in August 2021, a leading Chinese government-controlled telecom vendor, ZTE, was searched. The Huawei raid is the latest example of India’s tightened scrutiny of Chinese tech companies amid geopolitical tensions between the two countries.
Meanwhile, as China-India relations are in a free-fall due to the ongoing border crisis, there is a steady increase in the collaboration between India and Taiwan in select areas. For instance, Taiwanese scientists will be a part of an international team for launching a satellite from India's Space Research Organisation's Satish Dhawan Space Centre in Sriharikota. The launch vehicle will send an observation satellite named EOS-04 into an orbit at 529 kilometres above the Earth's surface. The cube satellite INSPIRESat-1, partly developed by National Central University (NCU), Taiwan, will join India's satellite, the INS-2TD, in the atmosphere. Elsewhere, Taiwan's Foxconn plans to enter into a joint venture with India's Vedanta to set up a chip plant in India. Foxconn, known locally as Hon Hai Technology Group, said it signed a memorandum of understanding (MOU) with Vedanta to "support Indian Prime Minister Narendra Modi's vision to create an ecosystem for semiconductor manufacturing in India," according to a company press release. The Taiwanese company said it would take a 40% stake in the joint venture with an investment of around US$119 million (NT$3.32 billion).
If the move to create the semiconductor manufacturing plant succeeds, it will be only the second such facility by Taiwan in a foreign country after its production hub in the United States, government sources were quoted in Indian media.
Also Read:
It is up to Beijing to hold a Russia-India-China summit, says Moscow
‘Very Difficult Phase’: External Affairs Minister On India-China Ties
III. Covid & Xi’s Core Status a ‘Magic Weapon’
by Manoj Kewalramani
As I mentioned in the first section of the newsletter, the top Chinese leadership had been out of the public gaze ever since the diplomatic frenzy around the Olympics. This week, starting with Li Keqiang attending the weekly State Council meeting, each of them gradually returned to public engagements. Some of the key domestic developments are as follows:
In terms of news, it’s important to note that COVID-19 continues to spread across the mainland despite the tough zero Covid policy. For instance, China reported a spike in daily infections with 195 new cases in the mainland on Saturday, up from 137 cases a day earlier. China’s National Health Commission said in a statement that 94 of the new Covid cases were imported while 101 were locally transmitted. Mainland China has so far reported 107,707 confirmed infections and 4,636 deaths.
The situation is much worse in Hong Kong. This week, in an unusual development, local newspapers Ta Kung Pao and Wen Wei Po, which answer to the Liaison Office in Hong Kong, reported on Wednesday that Xi Jinping had called on the city’s authorities to “implement every necessary measure to ensure the protection” of public health. Hong Kong needs “to prioritise stabilising and controlling the Covid situation above everything else”, the papers reported Xi as saying.
A day earlier Carrie Lam had ruled out a hard lockdown. Lam had insisted that a hard “wholesale” lockdown, which the mainland has imposed on various cities in order to stamp out cases, will not be imposed on Hong Kongers. After Xi’s reported comments, Lam issued a statement saying: “The government will, in accordance with the important instruction of President Xi Jinping, assume the main responsibility to... adopt all necessary measures to safeguard the lives and health of Hong Kong people.”
All this comes as Hong Kong is reporting record-high caseloads, with hospitals being overwhelmed. On Friday, Lam said the election for the Chief Executive post would be postponed by six weeks to May 8 due to “public health risks.” Also, two expert teams from the mainland have traveled to Hong Kong to assist with the outbreak. In addition, on Saturday, the construction of two community isolation and treatment facilities built with assistance from the mainland began at Penny’s Bay and Kai Tak Pier in Hong Kong. Xinhua reports that the two isolation facilities are expected to provide about 9,500 quarantine units when fully operational.
Moving on, this week, the People’s Daily began a series of commentaries around the 10 Clears 十个明确, which were highlighted in the history resolution passed in November 2021. These, the commentaries say, are key components of Xi Jinping Thought. I’ve done a breakdown of five of these pieces in my People’s Daily tracker this week. It’s worth noting that only the first article in the series was published on the first page of the paper. All others have been featured on the second page. The first article talked about the significance of the Party’s leadership and even more importantly, the criticality of Xi’s core status.
Some excerpts below:
“Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era is contemporary Chinese Marxism, 21st century Marxism, the essence of Chinese culture and Chinese spirit of the times, and it has achieved a new leap in the sinicization of Marxism.” 编者按:习近平新时代中国特色社会主义思想是当代中国马克思主义、二十一世纪马克思主义,是中华文化和中国精神的时代精华,实现了马克思主义中国化新的飞跃.
There’s some more praise for Xi for having led the Party since 2012, and then the article says that “the original ideas, transformative practices, breakthroughs and landmark achievements over the past nine years have provided a more perfect institutional guarantee, a more solid material foundation and more active spiritual power to achieve the great rejuvenation of the Chinese nation. The key to China's success lies in the Party. The system of socialism with Chinese characteristics has many obvious advantages, of which the leadership of the CPC is the greatest. It is the fundamental guarantee for the existence and functioning of other advantages.” 9年多来的原创性思想、变革性实践、突破性进展、标志性成果,为实现中华民族伟大复兴提供了更为完善的制度保证、更为坚实的物质基础、更为主动的精神力量. 办好中国的事情,关键在党。中国特色社会主义制度具有多方面显著优势,其中中国共产党领导是最大优势,是其他方面优势得以存在和发挥作用的根本保证.
For instance, “only under the system of socialism with Chinese characteristics can we achieve a comprehensive victory in poverty alleviation; only under the leadership of the Communist Party of China can we create a miracle on earth that is impossible for any political force in the world to create!” 只有在中国特色社会主义制度下,脱贫攻坚才能取得全面胜利;只有在中国共产党领导下,我们才能创造出世界上任何政治力量都不可能创造的人间奇迹!
Towards the end of the article, it emphasises the importance of the Party’s leadership, adding that:
“the Party Central Committee must have one position as the highest authority, making the final decisions…” The establishment of Xi Jinping as the core of the CPC Central Committee and the core of the whole party, and the establishment of the guiding position of Xi Jinping Thought on socialism with Chinese characteristics for a new era reflect the common aspiration of the whole party, the whole army and the people of all ethnic groups in the country. This is of decisive significance to the development of the cause of the party and the state in the new era and the historical process of the great rejuvenation of the Chinese nation.” “党中央必须有定于一尊、一锤定音的权威” “党确立习近平同志党中央的核心、全党的核心地位,确立习近平新时代中国特色社会主义思想的指导地位,反映了全党全军全国各族人民共同心愿,对新时代党和国家事业发展、对推进中华民族伟大复兴历史进程具有决定性意义.”
After this, there’s a whole chunk that talks about the importance of establishing and maintaining the core of the Party. In this effort, Marx, Engels and Lenin are roped in. Then the piece says:
When the red flame was ignited in China, the people realised more and more clearly from the bright oil lamp in the small building in Zunyi, Guizhou, and from the spring breeze of reform and opening up that having a core is the magic weapon to lead one from victory to victory; when we defend the core, we are defending the advantages of Marxist political parties. Since the 18th Party Congress, General Secretary Xi Jinping with a sense of loyalty evident in ‘I will be selfless and live up to the people’, has led the great ship called China to wade past dangerous shoals and navigated through rough waves, and promoted the historic achievements and changes in the cause of the Party and the country, becoming the well-deserved core of the Party, the leader of the people and the commander-in-chief of the armed forces. At present, the great rejuvenation of the Chinese nation has entered a critical period. The closer the goal is, the more arduous the task is, and the more important it is to regard ‘two safeguards’ as the highest political principle and fundamental political rule of the Party. To support and defend the core, we must constantly strengthen the party's political construction. 当红色火种在华夏大地点燃,人们从贵州遵义小楼明亮的油灯中、从改革开放的春风里愈发清晰地认识到,拥有了核心,就拥有了从胜利走向胜利的法宝;捍卫了核心,就捍卫了马克思主义政党的优势所在。党的十八大以来,习近平总书记以“我将无我,不负人民”的赤胆忠心,引领中国号巨轮涉险滩、战恶浪,推动党和国家事业取得历史性成就、发生历史性变革,成为众望所归、当之无愧的党的核心、人民领袖、军队统帅。当前,中华民族伟大复兴进入关键时期。越是接近目标,越是任务艰巨,越要把“两个维护”作为党的最高政治原则和根本政治规矩。——拥护核心、捍卫核心,就要不断加强党的政治建设.
Also:
As we engage in the great practice of socialism with Chinese characteristics for a new era, all Party members have come to a deeper understanding that to safeguard General Secretary Xi Jinping’s core position means to safeguard the authority and centralized, unified leadership of the CPC Central Committee; to uphold the authority and centralized, unified leadership of the CPC Central Committee, we must, above all, safeguard General Secretary Xi Jinping’s core position. 置身新时代中国特色社会主义伟大实践,全党上下更加深刻认识到:维护习近平总书记核心地位,就是维护党中央权威和集中统一领导;维护党中央权威和集中统一领导,首先要维护习近平总书记核心地位.
So how does one do this:
First, “to support and defend the core, one must be a firm believer and faithful practitioner of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.” 拥护核心、捍卫核心,就要自觉做习近平新时代中国特色社会主义思想的坚定信仰者、忠实实践者. Doing this involves listening to speeches, studying documents, discussing and exchanging views. In doing so, one thoroughly arms themselves with the Party’s “innovative theory,” “constantly consolidating the ideological foundation” to achieve the two safeguards.
Second, “resolutely implement General Secretary Xi Jinping's important instructions and requirements as well as the decisions and plans of the CPC Central Committee in all work.” 拥护核心、捍卫核心,就要在各项工作中坚决贯彻落实习近平总书记重要指示要求和党中央决策部署.
Later in the week, another new article series was initiated. On Friday, there was a long article titled: A historical leap in the great era (forge ahead for a new journey and make contributions for a new era) 伟大时代的历史跨越(奋进新征程 建功新时代). Throughout the piece, including the sub-header at the top, there were some 20 references to Xi Jinping. This reads like a long campaign pitch, making the case for Xi Jinping’s continued leadership. For instance, the article says:
Since the 18th Party Congress, the Party and the country have made historic achievements and experienced historic changes; the most fundamental reason behind these is that General Secretary Xi Jinping, as the core of the Party Central Committee and the core of the whole Party, has been at the helm and steering the ship, and the scientific guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. 党的十八大以来,党和国家事业取得历史性成就、发生历史性变革,最根本的原因在于有习近平总书记作为党中央的核心、全党的核心掌舵领航,在于有习近平新时代中国特色社会主义思想科学指引.
And then:
“The great achievements and profound changes since the 18th Party Congress have demonstrated the great vitality of socialism with Chinese characteristics, and provided a more perfect institutional guarantee, a more solid material foundation and a more active spiritual force for the great rejuvenation of the Chinese nation…On November 8, 2021, at the Sixth Plenary Session of the 19th CPC Central Committee, General Secretary Xi Jinping issued a call to the whole Party, armed forces and people of all ethnic groups: “Do not forget the glory of yesterday's suffering, be worthy of today’s mission and live up to tomorrow’s great dream.” The 20th Party Congress will be held this year. This is a major event in the political life of the Party and the country. At the end of 2021, General Secretary Xi Jinping issued important instructions, stressing that we should focus on studying and implementing the spirit of the Sixth Plenary Session of the 19th CPC Central Committee, promote the whole Party to thoroughly understand the Party’s innovative theory, carry forward the great spirit of Party building, strengthen the confidence and determination to traverse the Chinese path of modernization and realise the great rejuvenation of the Chinese nation, unite and lead the people of all ethnic groups in the country to forge ahead on a new journey and make contributions to a new era with confidence, and greet the 20th Party Congress with practical actions. Let us unite more closely around the CPC Central Committee with Comrade Xi Jinping as the core, fully implement Xi Jinping Thought on socialism with Chinese characteristics for a new era, deeply understand the decisive significance of the ‘two establishments’, strengthen the ‘four consciousnesses’, strengthen the ‘four self-confidences’ and achieve the ‘two safeguards’, learn from history, create the future, work hard and bravely, and realize the Chinese dream of the great rejuvenation of the Chinese nation…” 党的十八大以来的伟大成就、深刻变革,彰显了中国特色社会主义的强大生机活力,为实现中华民族伟大复兴提供了更为完善的制度保证、更为坚实的物质基础、更为主动的精神力量...2021年11月8日,在党的十九届六中全会上,习近平总书记向全党全军全国各族人民发出号召:“勿忘昨天的苦难辉煌,无愧今天的使命担当,不负明天的伟大梦想”。今年将召开党的二十大,这是党和国家政治生活中的一件大事。2021年底,习近平总书记作出重要指示强调,要聚焦学习贯彻党的十九届六中全会精神,推动全党学深悟透党的创新理论,弘扬伟大建党精神,坚定走好中国道路、实现中华民族伟大复兴的信心和决心,团结带领全国各族人民满怀信心奋进新征程、建功新时代,以实际行动迎接党的二十大胜利召开。让我们更加紧密地团结在以习近平同志为核心的党中央周围,全面贯彻习近平新时代中国特色社会主义思想,深入领会“两个确立”的决定性意义,增强“四个意识”、坚定“四个自信”、做到“两个维护”,以史为鉴、开创未来,埋头苦干、勇毅前行,为实现第二个百年奋斗目标、实现中华民族伟大复兴的中国梦而不懈奋斗。
VI. Region Watch
by Shibani Mehta
While repeated litmus tests over China’s ‘debt trap diplomacy’ in the region give inconclusive results, anxieties about Beijing’s hand in the slowdown of other infrastructure and related projects are growing rapidly. A $500-million US dollar grant project between Nepal and the United States has got Nepal’s coalition partners bickering, protestors clashing with police and the traces of a misinformation campaign with Chinese features.
Signed in 2017, shortly after Nepal joined the BRI, the Millennium Challenge Corporation (MCC) Nepal compact focused on increasing the supply of electricity in the Himalayan nation. The controversy surrounding the grant has intensified since the Parliament’s winter session of 2021, on Friday, student members of the Maoist Centre and Unified Socialist took to the streets of Kathmandu and clashed with security officials in a demonstration of their disagreement with the Prime Minister’s will to table the Compact in Parliament.
Prime Minister Sher Bahadur Deuba and the Nepali Congress are for Compact as coalition partners, Communist Party of Nepal (Maoist Centre), CPN (Unified Socialist), Janata Samajbadi Party and Rastriya Janamorcha, believe that some clauses supersede the law of Nepal and must be amended before the Compact’s ratification. Drivers of coalition politics aside, critics of the Compact view it as a peg in Washington DC’s Indo-Pacific military strategy to encircle China, a narrative likely to have been spun by Beijing. The controversy about the grant has almost exclusively focused on the possible intentions of the United States, a doubt which China may have amplified through a misinformation campaign.
A State Department’s representative has verified that the United States has asked Nepal to decide on the grant by February 28, respecting Prime Minister Deuba’s request for five months to fulfil commitments towards the MCC in a letter dated September 2021.
Calling it 'coercive diplomacy', Beijing remarked that the United States must act without political conditions.
When asked about the United State’s take on the political controversy, a State Department spokesperson said,
‘Whether the Nepali government ratifies the MCC electricity-transmission project is a sovereign decision for Nepal to make…Should outside influence and corruption cause parliament not to ratify, it would be deeply concerning for the US, and a loss for the people of Nepal.’
The United States believes that the Compact has been undermined by ‘a long and sophisticated misinformation campaign’. In 2019, Nepal asked MCC to wait for ratification. According to sources, most projects see the beginning of the construction phase 18 months after signing. In Nepal’s case, it has been five years since the signing and the treaty is yet to be ratified. A political hot potato, the Compact reflects Nepal’s (and the region’s) propensity to view domestic issues and bilateral engagements from a geopolitical lens.
Also Read
V. China-US Ties
by Shrey Khanna
On February 12, the Biden Administration released the U.S.’ Indo-Pacific Strategy as discussed in last week’s newsletter. In a press conference on February 14, China’s Foreign Ministry Spokesperson Wang Wenbin gave his country’s position on the issue. He said that the U.S.’ “ill intentions” underlie its Indo-Pacific strategy.
“What the U.S. says in its “Indo-Pacific strategy” is different from what it is actually doing. The U.S. claims to advance “freedom and openness” in the region, but is in fact forming an exclusive clique through AUKUS and QUAD. It asserts to strengthen regional security, but is generating grave nuclear proliferation risks that would undermine regional peace and stability. It professes to promote regional prosperity, but is stoking opposition and confrontation between regional countries which undercuts the ASEAN-centered regional cooperation architecture that has formed over the years, and poses a serious threat to regional cooperation outcomes and development prospects. This “strategy” that resurrects the Cold War mentality and bloc politics has nothing new and no future, but will only bring division and turbulence to the Asia-Pacific. It will surely be greeted with nothing but vigilance and rejection from regional countries.”
In his press conference on February 15, Wang targeted the executive order made by U.S. President Biden to split frozen assets of the Afghan central bank. He said that:
“Without the consent of the Afghan people, the U.S. willfully disposes of assets that belong to the Afghan people, even keeping them as its own. This is no different from the conduct of bandits. This latest example has once again laid bare that the “rules-based order” the U.S. claims to champion is not the kind of rules and order to defend the weak and uphold justice, but to maintain its own hegemony. As the culprit of the Afghan crisis, the U.S. should not exacerbate the suffering of the Afghan people. It should unfreeze their assets, lift unilateral sanctions on Afghanistan as soon as possible, and assume its due responsibility to ease the humanitarian crisis in the country.”
In response to Pentagon press secretary John Kirby’s assertion that China’s “tacit support” for Moscow in the Ukraine stand-off is “deeply alarming”, Wang countered by saying that:
“Under the current circumstances, exaggerating and hyping up the possibility of warfare is not responsible behavior. Resorting readily to sanctions and pressure won’t help with deescalating the situation. Clamoring for bloc confrontation will only lead to the old path of the Cold War. We call on all sides to adopt an equal and open attitude, and work for the earnest implementation of the Minsk-2 agreement through dialogue and negotiation so as to create conditions for a political resolution of the Ukraine crisis.”
On February 15, U.S. Secretary of State Antony Blinken gave a press statement on the first anniversary of the Declaration Against Arbitrary Detention in State-to-State Relations. While the statement did not name China, it said that the governments who engage in the practice of arbitrary detention of foreign nationals “must cease immediately.”
In response, Wang said in his press conference on February 16 that “How ironic it is that the U.S. and Canada issued statements…on the grounds of human rights protection when the U.S. is keeping Afghan people’s assets as its own.”
He then highlighted China’s “facts” on the issue:
“First, the so-called Declaration Against the Use of Arbitrary Detention is a product of diplomatic fraud. With US’ echo and support, Canada put some countries on the list of endorsement against the latter’s will of not approving and not participating in co-signing the declaration. This fraudulent act that violates the norms governing international relations and falsifies wide endorsement has also met opposition from the countries concerned.
Second, the U.S. and Canada stand out when it comes to arbitrary detention. Ms. Meng Wanzhou was detained by Canada for more than 1,000 days without violating any Canadian law. This is out-and-out arbitrary detention. The U.S. is an old hand at arbitrary detention. Here are some examples. Domestically, the U.S. arbitrarily detains innocent immigrants, separates migrant children from their families by force, and tears innumerable families apart. Internationally, the Guantanamo Bay prison only epitomizes the U.S.’ network of secret prisons across the world. According to a human rights group, since 2001, the U.S. has turned up to 17 military vessels into “floating prisons” and “floating Guantanamos”, where human rights tragedies keep repeating.”
He further stated that:
“The label of arbitrary detention suits the U.S. better than anyone else. I want to stress that both the U.S. and Canada have a disgraceful track record causing storms of protest, be it arbitrary detention or human rights violation of people in developing countries. We urge the countries to stop such hypocritical and preposterous performance, and focus on correcting their own mistakes of violating international rules and infringing on human rights, including arbitrary detention.”
On February 16, in an interview with AFP, U.S. Treasury Secretary Janet Yellen called upon China to do more to accelerate global efforts to provide debt relief for low-income countries that ramped up borrowing during the pandemic.
Wang responded on February 17 by saying that:
“As we have repeatedly stressed, in line with the G20 consensus, China has fully implemented the G20 Debt Service Suspension Initiative for Poorest Countries. The total debt service payments suspended by China are the largest among G20 members. In addition, China’s non-official financial institutions have also taken debt service suspension actions in a comparable manner with reference to the Debt Service Suspension Initiative (DSSI) provisions, which is rare among G20 countries. Besides, working together with other members, China also handled some countries’ debt on a case-by-case basis under the Common Framework for debt treatment. These measures China adopted have played a positive role in easing relevant countries’ debt burdens.”
Wang also argued that the issue of rising debt in developing countries has little to do with China. He said that:
“I would like to point out that developing countries’ debt issue is a long-standing one. It is about development in essence. The issue has also been impacted by the macro-economic measures of major economies. According to authoritative international agencies, multilateral development banks and private creditors, mainly commercial institutions of developed countries, account for a large part of the debt structure of these heavily indebted poor countries (HIPC). For example, multilateral financial institutions and commercial creditors account for more than three quarters of the total external debt owed by African countries. Their claims are an important cause of these countries’ debt problems, and they bear a greater responsibility in helping developing countries reduce their debt burden. China calls on these institutions to contribute more to alleviating the debt burden of developing countries.”
This week marks the 50th anniversary of the rapprochement between the U.S. and China. The Sino-Soviet split in the late 1960s had provided the Nixon administration a strategic opportunity to improve its relationship with Mao’s China and shift the cold war balance of power. In 2022, the situation is starkly different. While the Beijing-Moscow axis has become stronger at any point in their history, the US-China relationship continues to deteriorate. Against this backdrop, this week there were articles commenting on changes in the US-China relationship since 1972.
Writing for Project Syndicate, Richard Haass of Council on Foreign Relations called upon the U.S. policymakers to adopt an imaginative approach to China like the one Nixon had adopted. Haass argued that
“The deteriorating trend in Sino-American relations is dangerous for the world. The growing geopolitical rivalry between the U.S. and China not only could lead to conflict but also risks precluding cooperation on global challenges ranging from climate change and infectious disease to cyber threats and nuclear proliferation.”
Therefore,
“The best way to mark the 50th anniversary of the opening to China is not with champagne but by crafting an equally imaginative approach to help revive the relationship. This would again acknowledge the differences between the two countries’ political and social systems, continue to finesse their disagreement on Taiwan, maintain economic ties other than those involving sensitive technologies, and foster cooperation on regional issues such as Afghanistan and North Korea, in addition to tackling global challenges together.”
There were other differing takes in the magazine, including one by Spain’s former Foreign Minister Ana Palacio who argued that “the West, together with its democratic partners and allies in Asia, should be thinking carefully about how to counter this “alliance of autocracies” led by China and Russia.”
Writing for NIKKEI Asia, Lowy Institute’s Richard McGregor gave a succinct survey of the US-China relationship since the rapprochement. He argued that:
“Half a century on, the Nixon-to-China moment has lost its sparkle and ability to inspire. This year, the summit that captivated the world was not between China and the U.S., but China and Russia, as Xi and Russian President Vladimir Putin met ahead of the opening of the Beijing Winter Olympics.”
Also Read:
VI. The Metaverse Frenzy
by Megha Pardhi
Chinese local governments are joining the "metaverse"(元宇宙)) frenzy. Protocol reports that in January, at least 10 Chinese cities and provinces in China started including the metaverse industry in their economic development plans or courting metaverse companies, including Shanghai and Beijing.
Last year in December, Shanghai's Party Secretary Li Qianmg had mentioned the importance of platforms facilitating interaction between the virtual and real-world in a speech to the Shanghai Municipal Party Committee Economic Work Conference.
Such attempts by local governments are being promoted under the umbrella term of "digital economy" as also highlighted in the Protocol report. The political system in China encourages competition among the local governments to attract investment and high-tech industries. As the Chinese government looks out for ways to combat economic downturns, keeping up with high-tech development seems to be a way ahead.
Metaverse (元宇宙) has gained tremendous momentum in China. According to enterprise data service company Tianyancha (天眼查), more than 1000 companies in China have applied for trademarks related to the metaverse. Tianyancha data also shows that more than 500 companies in China contain "metaverse" in their name. Around 93% of these companies have been established in 2021 alone. This shows a clear spike in the tech sector in China.
China Mobile Communication Association (CMCA), registered with the Ministry of Foreign Affairs, established a "metaverse committee" in October 2021. CMCA is backed by tech companies like China Mobile and Huawei. Such committees are generally set up when there is an emphasis on accelerating the growth of technology.
Tech giants like Baidu, ByteDance, and Tencent have also shown interest in the metaverse. Baidu has already launched its own virtual platform called "XiRang", becoming the first to do so in China. Financial Times reported that Tencent and Alibaba have also filed for trademarks on metaverse-related concepts.
As always, this frenzy has also raised some concerns among officials. On Feb 18, China Banking and Insurance Regulatory Commission (中国银行业监督管理委员会) (CBRC) issued a warning about the possible dangers of fraud in the metaverse. The warning notice mentions fraud attempts disguised as opportunities to invest in virtual investment projects, virtual-real estate, virtual currency, and pay-to-earn (P2E) games.
Digital Yuan at Winter Olympics
e-CNY, China's digital Yuan has been rolled out for foreigners visiting Beijing for Winter Olympics. ATM machines at the Beijing Olympic venue are facilitating the conversion of currency in e-CNY. e-CNY, also called Digital Renminbi, was launched by the People's Bank of China.
Some key milestones in the development of e-CNY are:
2017 - Sate Council approved digital Renminbi
2019 - People's Bank of China announced they will release digital renminbi
2020 - Initial testing of e-CNY was done in Shenzhen, Suzhou, Chengdu, and Xiong'an in April
2021 - Testing of e-CNY expanded to Shanghai, Hainan, Changsha, Xi'an, Qingdao, and Dalian
2022 - Testing of e-CNY rolled out for foreigners at Beijing Olympics
Beijing Olympics is a good place to test e-CNY’s reception among foreign users and popularize its use. The US, EU, and other economies are considering launching their own digital currencies, China’s e-CNY has to carve out a niche for itself, and soon.
Also Read:
US-China and Economic and Security Commission held a hearing on China's Cyber capabilities. I recommend reading Kelli Vanderlee's testimony on China's state-sponsored cyber capabilities.
EU launches WTO case against China over Huawei, Xiaomi tech infringements
Analysis: A metaverse with Chinese characteristics is a clean and compliant metaverse
VII. The Long & Short of It…
a. Trade & CPTPP:
This week, China’s Ministry of Commerce spoke about the country’s approach to foreign trade and agreements, outlining the year’s agenda. Gao Feng said that:
China has signed 19 free trade agreements with 26 countries and regions, covering Asia, Oceania, Latin America, Europe and Africa. China’s trade with free trade partners accounts for about 35% of its total foreign trade. In 2021, China's total import and export volume with free trade partners whose agreements have taken effect totaled 10.8 trillion yuan, up 23.6% year on year, 2.2 percentage points higher than the overall growth rate of China's foreign trade and 2.4 percentage points higher than the growth rate of China's import and export with non-free trade partners in the same period.
China has conducted a full, comprehensive and in-depth study and evaluation on the contents of the CPTPP. It is willing to make efforts to fully meet the CPTPP’s rules and standards through reform, and make a high-level opening commitment on market access, so as to provide all members with market access opportunities with great commercial benefits. At present, China is in contact and consultation with all members in accordance with the relevant accession procedures of CPTPP.
China is in close communication and conducting technical consultations with relevant parties on joining DEPA.
China will continue to press ahead with negotiations on free trade agreements between China and the Gulf Cooperation Council, China and Israel, China and Norway, China and Ecuador, and China, Japan and South Korea, and sign free trade agreements with more willing trading partners to jointly promote regional economic integration and trade and investment liberalisation and facilitation.
b. China at the Munich Security Conference
There were a lot of comments and warnings from European leaders around ties with China at the Munich Security Conference over the past few days. I am listing a few here to note:
NATO Secretary General Jens Stoltenberg: “for the first time, we now see Beijing joining Moscow in calling on NATO to stop admitting new members. It is an attempt to control the fate of free nations. To rewrite the international rulebook. And impose their own authoritarian models of governance. The current crisis demonstrates the importance of the transatlantic relationship for European security. Two World Wars and the Cold War has taught us that there is no real security in Europe without a strong transatlantic bond.”
European Commission President Ursula von der Leyen: “We are facing a blatant attempt to rewrite the rules of our international system. One only has to read the recent communiqué issued by Russian and Chinese leaders. They seek a ‘new era', as they say, to replace the existing international order. They prefer the rule of the strongest to the rule of law, intimidation instead of self-determination, coercion instead of cooperation. We still hope that peace will prevail and that diplomacy will take us there.”
UK PM Boris Johnson: “If Ukraine is invaded the shock will echo around the world and those echoes will be heard in East Asia and they will be heard in Taiwan. When I spoke to the Prime Ministers of Japan and Australia this week, they left me in no doubt that the economic and political shocks would be felt on the far side of the world. So let me be clear about the risk. The risk now is that people will draw the conclusion that aggression pays and that might is right.
So we should not underestimate the gravity of this moment and what is at stake.”
Then there’s this from German Foreign Minister Annalena Baerbock:
On the new German government’s China policy, do note this from Nikkei Asia:
The German foreign ministry is poised to send a paper to other government departments urging them to regard China as a “systemic rival,” as the new Olaf Scholz administration breaks with longtime Chancellor Angela Merkel's non-confrontational approach. The ministry's plan, confirmed to Nikkei Asia by high-ranking German politicians, would make official key China-related points in a coalition agreement Germany's three ruling parties signed after their election win over Merkel's Christian Democratic Union last September, much to Beijing's displeasure. The deal between the center-left Social Democratic Party (SPD), the Greens and the pro-business Free Democratic Party (FDP) contained several elements that angered China, including allegations of forced labor camps in Xinjiang and a demand for more international integration of Taiwan. Although the ministry's intention to use the term “systemic rival,” first reported by Der Spiegel earlier this month, comes long after the European Commission slapped China with that label, it represents a major adjustment on Berlin's part. “Berlin shows that its new China policy brooms sweep cleaner than those of ex-Chancellor Merkel,” Reinhard Buetikofer, head of the European Parliament’s delegation for European Union-China relations and a member of the German Greens, told Nikkei Asia. “Three years after the European Commission and one and a half years after the European Parliament, the German government is finally acting by pointing at the reality of systemic rivalry between China us.”
c. China’s Defense Industrial Base:
There’s a new Rand Corporation study assessing the strengths and weaknesses of China’s defense industrial base. SCMP reports:
“China’s reliance on hi-tech imports and potential workforce shortages in the next decade are two big looming vulnerabilities for its defence industry, according to a new report by a US think tank. In the report released last week, researchers at the Rand Corporation said other weaknesses included a lack of transparency in the massive state-owned conglomerates and – despite some advantages – single-party control over the enterprises…The report said China was reliant on the United States and US allies in several areas, including education, raw materials, advanced components, and intellectual property. China’s defence innovation system does not effectively transmit knowledge and information between its constituent components,” it said. The sheer scale of China’s practices for gathering these resources – education and IP – from foreign countries indicates the country’s own view of these areas as domestic vulnerabilities.”
Some data points from the report:
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EU launches WTO case against China over Huawei, Xiaomi tech infringements